Mar 13, 2023
In February 2023, the Organization for Economic Cooperation and Development (OECD) released technical guidance about new worldwide minimum tax rules including a specific temporary simplified approach to the U.S. measure for global intangible low-taxed income (GILTI). This guidance builds on what is referred to as the GloBE Model Rules (Pillar Two) and aims to clarify several issues as countries implement the rules.
However, as Patrick Marley, and Oleg Chayka explained to Law360, “As a matter of practice, not all Pillar Two initiatives set out in the 2021 implementation framework have been clarified so far.” They state that “the inclusive framework has yet to address a safe harbor that would simplify compliance in jurisdictions that have adopted a QDMTT.”
Further, Marley and Chayka raise issues about whether countries will have time to address any residuals Pillar Two issues in domestic law before the January 2024 deadline. “It will be important for domestic laws to accommodate potential revisions in a timely manner — without the need to adopt an international consensus among the inclusive framework for each issue that gets identified along the way,” said Marley and Chayka.
Read the full article by author Natalie Olivo published by Law360 on March 13, 2023 (subscribers only).